Venture Partner Perspectives: Richie Etwaru (CEO at Hu-manity.co; Fmr. Chief Digital Officer at IQVIA)

Welcome to FundRx Venture Partner Perspectives, where a FundRx team member conducts a brief interview with a FundRx Venture Partner, with the aim being to share the knowledge and opinions of a diverse array of healthcare clinical and industry experts. Subsequently, we hope these interviews spur further thought and potential innovation and action in the areas discussed.

This interview features Richie Etwaru. His career has spanned unlikely disciplines and multiple continents over two decades. He has had the honor to operate in academia, entrepreneurship, government advisory, and Fortune 500 companies in financial services and healthcare.

He previously served as Chief Digital Officer at IQVIA.

He’s been quoted in NPR, The Wall Street Journal, The Financial Times, The Washington Post, Computer World, Forbes, VentureBeat, WIRED, and has appeared on dozens of television stations and media outlets globally.

As founder and CEO of Hu-manity.co, Richie is known for pursuing the 31st Human Right “everyone has the right to legal ownership of their inherent human data as property.” He is driven to reshape the world by creating a new data economy, where inherent human data is legally human property. Follow him on Twitter @RichieEtwaru.

**This interview has been edited and condensed for clarity.**

Chris: What does your current day to day look like, and what’s most exciting to you and your team right now?

Richie: Currently, I’m the co-founder and CEO of Hu-manity.co, and like most ventures, it is pretty exciting and daunting at the same time. What I find very unique about this venture and what is really driving the motivation of the team is that we’ve discovered a market insight that has massive social and economic implications: the future economies are not going to run solely on creativity, which are intellectually-bought patents, copyrights, trademarks and productivity markets (which is labor).

From our vantage point, we see that activity markets are going to be a new addition to what drives future economies and will be comprised of the underlying data that represents human activity. With that market insight, we’ve recognized that there’s a gap of providers or solution providers that can bring consumers, corporations and computers into a marketplace where human activity data can be traded with fair practices around it. That’s the essence of this market insight and market gap identification.

What really motivates us, to the extent that our product has the right product-market fit and we’re able to drive the adoption and be successful, is that we’re actually bringing some historic change to the human species.

In essence, we would have triggered or assisted in playing out a pattern that played out only twice before in human history. That pattern is that humans and corporations eventually agree on the ownership and the trade of a raw material that comes from the species.

This pattern first played out as early as the 1600s, around the surge of creativity which led to intellectual property laws and other legislation. The second time it played out was around our productivity in the 1800s, which led to labor laws.

We think we can play it out in a similar pattern around our activity for the third time in the 2100s. With that type of historical precedence and opportunity to create such historic socioeconomic change that could potentially leave a mark of distinction on history, we are pretty motivated.

And I think that’s what’s keeping us all excited, focused and motivated around what we’re doing. The rest of it looks like any other venture — all of the trials and tribulations and celebrations. That’s kind of how I spend my day.

Chris: Can you share a bit more on your views about healthcare data privacy, and how patients and consumers might be able to monetize their health data?

Richie: I think the pattern here is that there ought to be a market with clearly defined fair trade principles around trading human data, whether it be in healthcare or financial services or any other vertical for that matter.

What’s unique about healthcare is that all three sides of the market are motivated to get the fair-trade practices and that there are three sides to the market. The consumers, the apps and devices, and the pharma and biotech buyers.

We describe the market as having the consumers and their personal data as data owners on the first side of the market. The corporations, such as pharmaceuticals and biotech companies, are the data buyers on the second side of the market. Then the digital health apps and digital health devices are the data collectors or the data curators on the third and final side of the marketplace.

Those are the three sides of the marketplace that we’re focused on. How do we bring consumers that have data, along with the apps and devices that collect and curate that data, together with the corporations that are interested in buying that data and having a relationship back with the consumers?

It’s essentially aligning a triangle of market motivation, so to speak.

There’s motivation on all three sides of that market. From a consumer side, the motivation is emotional, it is ethical and it’s financial. Consumers are pretty emotional about their healthcare data since it’s the most private data that we have. There’s also an ethical consideration, and obviously, the economics of it — which is that healthcare data is being used for substantial value creation.

There’s an additional question around data equity. The consumer side is fairly well understood and in many ways quite familiar. Where it gets interesting is on the app and the device side. And then we’ll talk about the third leg, which is the corporate buyer.

On the app and the device side, most digital health apps or most digital health devices do not abuse human data in the market place — meaning they do their best to not sell it to bad actors and struggle with the business model of giving a free app or a free device in exchange for monetizing data in a data marketplace.

There are performance limits to that business model, and as an app or device owner, there’s only so much you can dance around the issue until you get to a point where the question arises, “Man, I really wish I had high-definition consent, right?” I really wish the consumer was the listing agent of the data in the marketplace, and that there was a mechanism by which the consumer could be made aware of the potential monetization of the data and participate in it if they see fit. Doesn’t that sound right?

We have discovered that a lot of digital health apps and digital health devices are looking for a mechanism to get into the fair-trade data business model. That’s because their business model is a freemium app or device, or a highly discounted app or device, which is funded by potential data monetization on the back end, which has inherent operational limits.

That is, it breaks trust significantly if an app or a device starts to sell the data like gangbusters or to the wrong people. That’s the motivation to enter a fair-trade data market.

Then last — but not least — is the corporate buyer. This is the area of highest motivation.

If you think about a large pharma company or a large biotech company, there’s four big strategic billion-dollar programs or four categories of each strategic billion-dollar program. It ranges from digital health to precision medicine, prevention services, and patient engagement. Yes, there are others, but if you want to look at the big lumps of spending in pharma and biotech, it’s in those categories.

Two ingredients to those big strategic programs are more and better data and better AI. The challenge in front of the corporate buyer is that the better they get at leveraging data and AI, the closer they get to some very dangerous boundaries. The more data they buy and the better AI they develop, the closer they get to ethical boundaries or regulatory boundaries. Which is worse?

The better you get, the closer you get to being a digital big brother and the better you get, the closer you get to some sort of ethical boundary. It may result in crossing the lines of the interpretation of a regulation, whether it be GDPR or HIPAA.

Think about those three legs of the market motivation: First is the consumer who is very emotional and has ethical concerns that are driven by media, advocacy groups, and policymakers. Then there are the curators or the collectors, which are the apps and the devices that have been pushing the freemium business model to the edge of its operational limitations. Finally, think about the corporate buyer.

What’s needed in the middle is what we call “Fair Trade Data Marketplace,” powered by a capability such as “Consent as a Service” which enables apps and devices to clearly capture and collect high-definition consumer consent at scale. It’s a capability that allows consumers to clearly understand what they consented to and to then self-list their data on the Fair Trade Data Marketplace where corporate buyers can search for properly consented data and lease for fair-trade compliant use form a single marketplace. This marketplace dynamic differs significantly from a corporate buyer having to purchase data bespoke from two individual pain apps, three workout apps, and 16 mental health apps, for example, all of which would have different schemas, varied pricing, and uneven consent.

That’s where I see healthcare today. That’s where I see this data conversation. That’s our vantage point of understanding what the data ecosystem might look like as we move forward to scale past the limitations of the current industry data supply chain design.

Chris: Can we now transition a bit more into your past work within M&A transactions, specifically within the healthcare realm?

First, what transactions tended to work out the best? Do you see those types of transactions continuing to be the best bets going forward, or are there new trends developing in the industry, with the advent of larger tech firms getting involved in the healthcare space?

Richie: Yes, I’ve been an M&A guy in addition to being a tech or business guy for a couple of years, starting with my Wall Street days. This led up to some of the recent work in healthcare around the time when companies and great leaders recognize that you can either buy, build or partner.

What I think is important in nascent spaces, like the area that we’re in, is to recognize the life span or the life journey of an innovation or an innovative venture — or the path of an innovative venture that tends to end up being acquired by a larger company. Some ventures make it all the way out to IPO themselves, but many of them get acquired by larger companies.

The question is this: is exit by acquisition good or not good for innovation of the industry? The answer to that lies in whether the venture was acquired, or assets were acquired to scale the assets, sweat the assets, or to slow the assets.

Often, the large incumbents will buy a small, emerging player simply to slow them, because they’re capturing market share too fast and taking it away from the incumbents. The intent is to slow them down and restructure the competitive landscape.

Sometimes, the intent is to sweat the asset, which might happen when an incumbent does not have a comparable offering and want this differentiated offering in the portfolio without innovating in the trajectory of the venture. They simply sweat the assets by using the large business development and sales team of an incumbent to make sure they can get as much as they can out of that asset.

The other option is to scale the asset. That is when you see acquisitions occur, where the acquirer, the incumbent that does the acquiring, continues to invest in the innovation of that asset — the venture or start-up that’s being acquired. They really want to scale it because it becomes a cornerstone of their go-forward offering.

If you look at healthcare, by and large, there’s a lot more buying of assets to slow them or sweat them as opposed to scaling them. But with tech companies, especially the pure play tech companies, such as Apple or even Salesforce, the scenario is different. When pure play tech companies buy an asset, it’s more likely that they’re buying that asset to scale the asset: they believe in the founders and they love the innovation and the venture, so they’re going to continue to invest in the innovation arc of that asset.

This differs in healthcare, where a lot of the providers are incumbents with exceptionally good sales forces, so to speak, or business development herds. They would take an asset and really just sweat it or slow it down.

That’s where you really have to partition acquisitions recognizing that a horizontal pure play tech company will tend to be optimized more around scaling a technology, which is usually good for the industry. The innovation arc continues versus industry-by-industry acquisitions where the incumbents are not necessarily known to be innovative and they tend to acquire simply to sweat or to slow the acquired venture/asset.

Chris: All things considered, what are the 3–4 biggest gaps in healthcare that are most in need of energy and innovation, in your mind? Any promising companies or technological developments to address those gaps?

Richie: I think it’s easy to start from the inventions and then work your way up. There’s AI, machine learning, smart sensors, IOT, blockchain distributed ledger and more. It’s a very nuanced way to look at market needs or market dynamics.

I tend to first look at it from the people point of view, not the technology. I believe that every transformation, whether or not it involves technology, definitely begins and ends with people. Every big strategic vision, whether it involves really cool innovative technology or run of the mill solutions, begins and ends with people.

Relative to healthcare, we’re now starting to see the tipping point: we’ve met the threshold of the number of change agents needed within large healthcare companies to create an environment for change and experimentation.

To underscore this point, we think about healthcare as quite innovative because the scientific part of it actually requires quite a bit of research, which could easily be characterized as innovation. But the operational aspects of health care, the go-to-market aspects of healthcare, the supply chain and delivery, reimbursement and insurance and actuarial aspects of healthcare just did not have a high enough percentage of change agents within the organizations to truly drive change.

I think we’re starting to see enough change agents within the organizations. To measure this with low sophisticated tools, simply look at the tone and the narrative at healthcare conferences today versus healthcare conferences of 10 years ago. You’ll see a lot more of a change narrative.

However, I think the gap is that we have to recognize are those change agents have to turn into courage agents. It’s important to take the first step, to have people recognize that change is possible.

To clarify, step one is to make sure that you have a good population of change agents. It is important, but it doesn’t mean that you’re going to have change. A lot of companies have change agents, but it doesn’t mean that they’ve changed.

For example, Kodak had a lot of change agents and so did Blockbuster. But they didn’t survive, and that’s because they were lacking the courage to act.

The key is to recognize that the change is necessary and to know that the change is inevitable. But having courage agents is very important. And the reason why I think this is a gap goes back to your question. I think courage is what’s important in healthcare right now and recognizing the pathway to get us there. This is largely because we have a change in the economic period in front of us.

By this, I mean we’re currently in an economic period that is ending, and a new one is emerging where what corporations differentiate with in the future will be significantly different from what corporations differentiate with today.

Looking back to the year 2000, it was the beginning of an economic period where companies started to differentiate themselves with experience and engagement that emanated from the advent of the Internet. It doesn’t matter what you’re selling to someone, it’s more about wanting someone to feel awesome. Prior to that, companies differentiated themselves on the basis of price and quality.

The price and quality economic period started around 1940 with the democratization of credit where everybody could buy things, which led to stores and mass consumption. From 1940 to 2000, if you tracked the way that companies advertised or deployed their marketing strategies, it focused around optimizing processes. Price and quality are what mattered.

From 2000 onwards, if you look at company marketing, company differentiation and other initiatives, the experience centered around experience and engagement, with a lot of the work focused on digitizing processes.

Now, the market is shifting to an economic period where differentiating with price and quality is not the only important posture. In addition to price, quality, experience, and engagement, it’s going to become more important to also differentiate with trust and transparency as added capabilities.

I think that change to the trust and transparency economic period is going to happen sometime around 2022, where corporations will have to be able to prove that they’re trusted and transparent. This is really around ethical processes. It’s this type of change — being transparent with our processes — to which we are unaccustomed.

We’re not accustomed to prioritizing ethics around how we design our business models or the long-term implications for the consumer. When we design products and services that will thrive in the next economic period, look back to where we came from in the 1940s and look ahead to where we are now and where we are going.

Where we once differentiated based upon price and quality, we’re now differentiating based upon experience and engagement. We’re going in a direction that requires a blending of price, quality, experience, engagement and trust and transparency. That’s a very unusual type of change for us in the corporate world and that’s going to require courage.

The gap is not technology and it’s not necessarily innovation- it’s going to be courage. The type of change that we’re going to need to differentiate is based upon trust and transparency. These are not the type of things that we’ve learned in business school or what you learn from your manager. It’s not the type of things that you read about in the leadership books. It’s not new; trust and transparency require courage.

Chris: What tend to be your go-to resources — news feeds, different readings or speaking with other informed individuals to stay up to date about your field and healthcare in general?

Richie: I suppose I’m a multi-faceted bird. I still adjunct at different universities, so I still like to operate in the academic realm — where the rigor is high and the progress is slow in some of those areas. I think a good network of change agents and thought leaders, and courage agents within the various domains, whether it’s science or technology or leadership, are helpful. Conferences, Twitter, and communities have been good to cultivate these ideas.

I still tend to read quite a bit but am very suspect of short-form reading. I’m well aware that our attention span is getting collectively lower as a species, and everybody needs to fit something in 500 or 750 words. I tend to not read those posts.

If something is under 2,000–3,000 words [Editor’s Note: This piece is over 4,000 words], I usually don’t read it because my sense is that while it might raise awareness, there’s not enough depth in the message to truly move my intellectual center of gravity. From an information consumption perspective, I tend to be distrustful of short-form writing and I’m a lot more welcoming of long-form writing. I know that’s counter to how society’s moving, but that’s how I tend to try to activate the movement of my intellectual center of gravity from one place or another.

Chris: What is the most rewarding aspect of your current role, and what advice might you give young people to gain a leg up and contribute in a meaningful way?

Richie: I think this answer changes as we age. At least for me, this answer has changed as I go from one decade to another. In my twenties, the answer would probably have been different — could I travel and hang out with really cool people and eat and drink the best?

In my thirties, the answer would also have been different. But I’m in my forties now, and what I find most gratifying about my professional life is really activating others.

There’s a really interesting type of satisfaction that you get when you know that you’re working with someone who you’ve inspired or activated to get more out of their raw material — whether it’s intellectual capacity or curiosity. I don’t know whether that’s called mentoring or not, because I don’t know that I have a lot of formal mentoring relationships. But I find tremendous value in enabling other people to be the best that they could be.

To the extent that you could do that within your own organization, then that’s a self-fulfilling prophecy because you’re actually driving the success of your own organization by optimizing individual value. But I think it’s very interesting that leaders would come into a company and say we need to make this better. So there’s a change program going on and there’s a list of things that we’re going to start working on.

For example, we’ll start with making sure that we’re not spending too much on real estate and we’re optimizing ourselves on real estate spend. Let’s talk to all of our vendors and make sure that we’re spending wisely and that we’re efficient about how we spend our money. And let’s cut our nonprofitable customers and keep our profitable customers. By the way, let’s do a reduction in force.

Very rarely do you see a line item in the change narrative that says, ‘Let’s take the people that we have and see if they’re under-motivated. Let’s take the people that we have and see if they’re underutilized, and let’s build a program together to increase motivation and utilization.”

When people see self-fulfillment as a result of change, then the company has really changed as well. I tend to really enjoy that last line item at the bottom. How do young people get self-oriented into the right environments so that their careers can have an interesting trajectory?

I go back to good old-fashioned networking and building meaningful connections with people. I think that’s how you build a network of strong connections and as a result, build your own career.

I’ll give you an example. I often engage with folks who agree to meet and then send me an email that says, “Please click here. It’s my Calendly link, pick any of the spots that you want, and then we’ll meet.” It’s efficient to do this, but it’s low touch. It doesn’t make the other person feel like you actually care enough to meet them. It feels like here’s my link, go find a spot on my calendar, and I’ll talk to you when I’m free.

And I think that young people need to understand that while these tools are there and might be useful in building connections, they don’t build strong connections. I’ve found that strong connections with the right network are what help you optimize your career. So, I encourage young people to understand that and take the time to introduce themselves.

Say, “Thank you.” Talk to people about when you might want to meet, engage with them and invite their participation: “Hey, you know I’ve got these times on my calendar, what do you have? How can we work on it together?” Be more personal, build a stronger relationship as opposed to just sending the Calendly link and saying, “Find a slot, and I’ll talk to you.”

Chris: I completely agree with that aspect and how long it can take to truly nurture and build deeper connections. I think that’s a very underappreciated aspect of career and personal success, in general. Where can people find out more about what you’re up to, and potentially connect?

Richie: I think I’m super accessible and we’re at Hu-manity.co. We’re building the marketplace for the industry and so we’re heavily positioned to support the ecosystem. We’re excited to talk to everyone, really understand their drivers, and what they want to do as we build out this ecosystem together.

Chris: Any parting thoughts that you weren’t able to share previously?

Richie: I’m just really excited about the capital deployment model of FundRx. I think that the world could use a new model in how investments are qualified and clarified, and how capital is distributed.

I think this is very promising. It’s different from the traditional VC model or AngelList. It’s got all of what I think is missing in the existing models, though I don’t think that the existing models will go away.

But I’m really excited to welcome a new model of deal qualification and capital deployment within the venture space. I think it will open up access to some of those segments of venture operators who’ve been underserved in the past. I think this will be very interesting.